People in Wales have the lowest unsecured debt levels in Britain – but charities have warned even small amounts can push people over the edge.

People in Wales have the lowest unsecured debt levels in Britain – but charities have warned even small amounts can push people over the edge.

In 2008/10, households in Wales had the lowest median financial liability at £2,000 and the second lowest percentage of households with liabilities – 45.7 %, according to figures from the Office for National Statistics (ONS).

London had the highest percentage of households with at least one form of financial liability, 54.6 %, while the South East had the highest median value of financial liabilities at £4,200.

He said: “In terms of Wales having the lowest debt, it’s likely to be to do with income levels. It’s often the case that areas where people have higher incomes, the level of debt tend to be higher because they can access higher levels of credit. When you get in to trouble, you inevitably do at a higher level (of debt).”

Ashley Comley, specialist services manager at Rhondda Taf Citizens Advice Bureau, agreed that the levels of debt they see tend to be lower than those dealt with by offices in England.

He said: “We tend to find that our usual debt is less than £10,000 per client. That will be a mix of priority and non-priority debt – priority is mortgage, rent, council tax, electricity; the non-priority is credit cards, loans.

“Income levels are quite low in Wales compared to the rest of the UK. The relative burden can be quite high – someone loses their job or their relationship breaks down, hours are cut or some danger point happens.

“Some people have debts that they can manage, it could be hundreds of thousands of pounds, some people can have a couple of hundreds of pounds worth of debt (and they can’t cope).

“It’s relative; it completely depends on the situation.”

The ONS research was done in two waves, 2006-08 and 2008-2010, with the results suggesting people may be finding it tougher since the start of the economic downturn.

In 2006/08, 47.5% of individuals living in households in financial debt reported their debt as either a heavy burden or somewhat of a burden, compared with 49.4% of individuals in 2008/10; an increase of 1.9 percentage points.

The change is particularly noticeable for those who are say their debts are a heavy burden – in 2006/08, 16.2% of individuals considered their debt a heavy burden; a percentage which rose to 18% in 2008/10.

Mr Comley said in some ways, the credit crunch made things easier for some people.

He said: “The day they cut the interest rates, that was a fantastic day. I closed so many cases – people who were having mortgage problems, their mortgage suddenly fell from very high rates to much lower.

“The savings that some clients were making were as much as a couple of hundred pounds a month, through that they were able to deal with other debts.”

However, he said there has been a rise in pay day loans, and people struggling with smaller debts from several lenders rather than one big debt, and the CAB is predicting things will get much worse with the introduction of more of the UK Government’s benefit changes this year.

Mr Ware said generally the number of people seeking help from StepChange Debt Charity has stayed around the same, but the amount of debt they are struggling with has fallen.

He said: “The trend has been for debt levels to be decreasing since the credit crunch, people haven’t had access to the levels of credit that they did before.

“The reality is there are still a lot of people who are financially vulnerable. We’re seeing more people falling behind with household costs, council tax, rent, energy bills, the ones you need to pay. There’s an increasing number of people where the cost of living is pushing them into financial difficulties in the last year.

“That’s a thing that we haven’t necessarily seen before. That’s across the board, including significant numbers of working households. They may be low income (households) but it’s a financial problem that is creeping up to middle incomes.”

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